"The Economics of Grid Defection" (What is a 'utility in a box'? - k)

[kristopher]

The Economics of Grid Defection

Distributed electricity generation, especially solar PV, is rapidly spreading and getting much cheaper. Distributed electricity storage is doing the same, thanks largely to mass production of batteries for electric vehicles. Solar power is already starting to erode some utilities’ sales and revenues.

But what happens when solar and batteries join forces? Together they can make the electric grid optional for many customers—without compromising reliability and increasingly at prices cheaper than utility retail electricity. Equipped with a solar-plus-battery system, customers can take or leave traditional utility service with what amounts to a “utility in a box.”

This “utility in a box” represents a fundamentally different challenge for utilities. Whereas other technologies, including solar PV and other distributed resources without storage, net metering, and energy efficiency still require some degree of grid dependence, solar-plus-batteries enable customers to cut the cord to their utility entirely.



This first installment of two reports outlines the possible scenarios in five different U.S. regions—Hawaii, California, Kentucky, Texas and New York—and identifies when solar PV and storage combinations could disrupt existing utility business models. The continuing decline of solar PV and battery storage costs, coupled with increasing retail electricity prices, has resulted in grid parity today for commercial customers in Hawaii. The most optimistic projections, based on certain solar and efficiency targets being met, depict grid parity for millions of residential and commercial customers in New York and California within this decade....

You can download the full report or a summary at http://www.rmi.org/electricity_grid_defection

[FBaggins]

1. Am I reading that chart right?

He actually thinks that solar plus battery backup could not only cut the cord in Hawaii, but that it's currently cheaper to do so?

I think that's coming from the perspective of a passivhaus owner that doesn't mind having no electricity for a day or three if need be.

[kristopher]

2. I have no idea of the manner you're reading the chart.

Especially so since your comment has no bearing on the chart at all and is nothing more than another of your typical pronuclear, baseless attacks on renewable energy.

Given your dedication to promoting our current coal/nuclear system, this article should be especially troubling to you since it details how the system you embrace is almost certainly destined to become obsolete.

Poor Baggins.

[kristopher]

3. Two articles that have a bearing

Making it cost more for grid tied renewables:

ALEC Coordinates New Attacks on Renewables Mandates and Net Metering

Most of ALEC’s 2013 efforts were defeated through lobbying and grassroots initiatives undertaken by renewables advocates and climate change activists like Greenpeace and the Natural Resources Defense Council.

In 2013, ALEC's legislation targets sought to:
- Roll back renewables mandates
- Undo greenhouse gas emissions regulations
- Cut funding for emissions standards enforcement
- Ease regulatory controls on hydraulic fracturing (fracking)


ALEC’s 2014 efforts, according to Elsner and leaders of other activist groups, would:
- Weaken or eliminate state Renewable Portfolio Standards
- Weaken solar net metering policies
- Open loopholes in disclosure requirements for fracking chemicals
- Turn back federal EPA efforts to regulate GHGs and other power plant pollutants


Three ALEC-linked efforts are designed to limit solar growth, Elsner said. "Duke is working in North Carolina to weaken net metering. Washington state utilities are pushing a 'protectionist' policy to block private solar leasing companies from working there. And legislation to gut solar net metering in Kansas, backed by Kansas utilities, was taken up in an ALEC-chaired committee with five other...ALEC members."

In response to letters from Greenpeace to nine major utilities questioning their support of ALEC, a representative of MidAmerican Energy Holdings and its subsidiaries NV Energy and PacifiCorp said they do not and will not support ALEC efforts, Greenpeace researcher Connor Gibson reported. But Alliant Energy, Ameren, APS, Dominion Resources, NiSource, and PG&E have not responded.

http://www.greentechmedia.com/articles/read/ALEC-Coordinates-New-Attacks-on-Renewables-Mandates?utm_source=Daily&utm_medium=Headline&utm_campaign=GTMDaily


And making it less expensive and easier to go off grid. This article is, in effect, describing the evolution of micro grids.

Can Distributed Storage Help Expand the Midwest Solar Market?
Forget about California. Intelligent Generation sees a future for solar and storage in the heartland.
Katherine Tweed
February 24, 2014

... northern Illinois, which is the westernmost part of PJM territory, is exactly where Intelligent Generation is looking to make inroads with its behind-the-meter energy storage and software-as-a-service package.

“We are all about monetizing storage when it’s combined with solar,” said Jay Marhoefer, founder and CEO of Intelligent Generation. IG integrates client-owned storage assets with the grid to cut demand charges, as well as to provide frequency regulation or other services based on the owner’s needs.

If a grocery store in Ohio is talking to a solar developer, the store owner may find that the payback is simply too long, explained Marhoefer. A solar developer partner will then call IG, which will run analytics to size a solar system integrated with storage to serve the load so that it has a more attractive payback.

IG’s system uses data such as day-ahead pricing, demand charges, solar system data, weather forecast and a battery system’s capability to find the optimal way for the system to interface with the grid. IG takes the signal from PJM, runs its analytics to come up with the best solution, and then tells the battery what to do. IG monitors clients' solar systems, but does not control them...

http://www.greentechmedia.com/articles/read/intelligent-generations-software-makes-solar-and-storage-more-attractive?utm_source=Daily&utm_medium=Headline&utm_campaign=GTMDaily

[kristopher]

4. Kick for novices.

[kristopher]

5. Is Utility 2.0 a Forecast or a Post-Mortem?

Is Utility 2.0 a Forecast or a Post-Mortem?

John Farrell
February 26, 2014


For the last six months, the energy news sphere (perhaps led by the Edison Electric Institute) has been rife with a discussion about the threat to the utility business from distributed energy like local solar, as their customers shift to getting their own power from nearby renewable resources. Reports and news stories – e.g. “Adapt or Die” – suggest changes to the electric utility business model are imminent as power generation shifts from massive to medium scale and from remote to local.

For some utilities, this discussion is not a forecast, but a post-mortem.

Electric utilities have always built infrastructure (power lines, power plants, etc.) as long-term investments. They relied on growing electricity demand and sales to help recoup the costs of new coal-fired power or (over budget) nuclear retrofits in the Midwest or new high-voltage power lines in the Northeast. Utility commissions played along, allowing them cost recovery and generous returns on equity (10-11 percent) for new infrastructure. But hardware that seemed wise in the 1990s and 2000s is suddenly and rapidly being exposed as untimely and unnecessary.

Electricity demand has flattened (even fallen), thanks to energy efficiency legislation and economic stagnation. Customers are increasingly generating their own energy from renewable energy like solar, whose cost is falling by 10 percent or more per year. Not only is big infrastructure proving harder to pay off as revenues stagnate, it’s also increasingly irrelevant in a 21st century electricity system where power generation can be cost-effectively placed right on the roof.

Commercial wind power started to crack the facade 20 years ago, but today renewable energy is rapidly imploding the utility’s entire antiquated business model...

http://www.renewableenergyworld.com/rea/blog/post/2014/02/is-utility-2-0-a-forecast-or-a-post-mortem?cmpid=SolarNL-Thursday-February27-2014

[hunter]

6. A mix of natural turbines, solar, and wind does work...

... but that's not my idea of a "solution."

What we are getting with "grid defection," at least in the rural and semi-rural sector is something dirtier: solar, filthy lead-acid batteries, and filthy gasoline or diesel "backup" generators. (I know you've seen this, kristopher.)

For larger users, or neighborhood co-ops with "micro" gas turbines, co-generation, and other gadgetry, it's still filthy gas. Fracking is a wretched and temporary thing that ought not be encouraged.

In "developing" nations the recycling of lead-acid batteries and the use of poorly maintained gasoline or diesel generators, in combination with solar and wind power, is a very filthy source of electricity.

I'm still going to insist that "lifestyle changes" such as having fewer children, increased education, and abandoning the automobile and "consumer" lifestyle is a more effective way of "saving the world" than any possible gadgetry.

Teach a human organic agriculture and birth control, everyone will be fed. Teach a human to buy stuff and all is lost.

[hunter]

8. Please stop.

I'm an equal-opportunity hater of all high energy "consumer industry" technology.

In the long run a single birth control prescription will save much more energy than the solar panels on some wealthy person's roof.

If I give $1000 to Planned Parenthood it goes a lot further than if I spent a $1000 on solar panels.

If I buy a decrepit old car for $800 and don't drive it much, that goes a lot further than buying a Tesla and commuting a hundred miles a day, five days a week just to pay for it.

If I live in a place where I can walk to the grocery store, and I don't generally buy refrigerated or frozen foods, and I feed "leftovers" to the compost heap or the animals, then I don't need a refrigerator/freezer, and the grocery store doesn't need so many either.

If I'm mostly vegetarian all that high energy grain doesn't have to be fed to meat animals.

If I live in a city and don't need a car, if I walk to work and back, and my house is warm enough when I close the windows, and cool enough when I open them...

Well, anyone can see where this is going.

To me the "highest techs" don't require fossil fuels or nuclear energy.

Plant a robust "heirloom" species, even an heirloom that became such just this year, power a water well with a solar panel no batteries required, invent a better vaccine or a better form of birth control, or a new inexpensive way to safely turn poop into fertilizer... these are the highest technologies of humans.

[hunter]

10. Coal, fracked natural gas, nuclear... What's the difference?

[kristopher]

12. OK I will.

I just deleted the posts challenging your position.

Not because your position has merit, but because I've just spent almost 90 minutes reviewing old threads you've contributed and I believe you genuinely aren't able to recognize the inherent contradiction in your positions and how you are quite literally pulling against yourself.

Sha gatta ga nai.

i hope that peace and happiness will always be with you because you seem to be a very kind soul.

[Yo_Mama]

13. That's all true, and these are excellent points

Conservation is always going to provide the maximum return, whether that return is assessed in terms of costs, in terms of net energy saved, or in terms of emissions/pollution reduction.

But I doubt this lifestyle is generally feasible. Thus we do have to have the alternate techs, because while all your points are valid, they are unlikely to coexist.

If you live in a city, it is highly unlikely that you will not need energy to either warm or cool your apartment. It is generally in the country where the low-energy housing can be constructed. And if you live in the country and have a compost pile and animals to feed, you drive more. And in some places not suitable for ag, the meat animals are the "low-energy, low-environmental impact" food source, and if you live in NYC, the vegetables are trucked in and cooled and aren't low-energy any more.

[hunter]

16. I disagree.

In dense urban areas, in suitably insulated buildings, heat can be provided by the activities of ordinary life.

Cooling can be provided from intermittent power sources like wind and solar. Ice is amazing stuff. Make ice in the day when the hot sun is shining or anytime the wind is blowing, then melt the ice to cool and dehumidify your bedroom at night.

I happen to live in a mild climate where heating or cooling is generally considered a luxury. Plenty of people in our city do not heat or cool their homes. My parents and one of my siblings live in a similar places. Nobody has air conditioning and if the heat goes out it's not deadly, at most uncomfortable, and the pipes don't freeze.

Creating such an environment in urban places, anywhere on earth, is not an impossible task, even without the use of fossil fuels.

There are incredibly diverse and healthy cuisines worldwide that do not require grocery stores with refrigerators or freezers.

I live in a fairly dense suburban environment. My wife and I do not commute, we've been very fortunate and have avoided that lifestyle since the mid-'eighties. We have a compost heap and are mostly vegetarian. What leftovers the dogs won't eat, the compost heap will.

No, I have not convinced my wife to get rid of our refrigerator, but as a kid and young adult I've lived and prospered without one.

We could purchase solar panels to support a refrigerator, but our local power source is inexpensive and fairly benign compared to the rest of the U.S.A., about 40% renewable, 20% nuclear, 25% gas, and the rest untraceable via "free market" skulduggery.

"Trucked in" could be as well done on electric rail, with electric delivery trucks, the electricity coming from entirely renewable sources.

Fresh greens can be grown anywhere there is sunlight, even in dense urban environments.

[One_Life_To_Give]

14. ISO's will adapt and suppliers are source independent

I think the mistake is assuming that the Independent System Operator and the Generating company are still linked. ISO will adapt and change the way charges are determined. Perhaps based upon a combination of maximum power flow capability and a time weighted actual flow rate. Likewise Generating companies will learn there are other ways the traditional sources. Cities need more power than their acreage allows from PV and Generating Co's will be happy to provide power generated elsewhere.

Reminds me of a Septic System vs Sewer connection. One can be cheaper long term. But that comes with a potential sudden large expense if something goes wrong. Whereas the Sewer is cheaper up front and the individual customer doesn't face the same potential of large unexpected repair bills.

[kristopher]

15. Well... it's true the ISOs and owners of generation will adapt.

The path of adaptation will favor generation sources that can ramp quickly to accommodate the expansion of VRE.
FERC has recently made rules establishing the requirement that the value of load following be recognized.

Here is a bit of information. The snip is about one rule but there are others.

...Under the old system, service schedules were set once an hour. This exposed variable providers to excess service charges to smooth out their supply because their generation varied within the hour. The new rule allows for variable providers to set schedules to 15-minute increments, giving them the ability to manage exposure to excess charges when generation input changes within the hour...

...FERC said this requirement will help transmission providers better manage resource variability.

...“This final rule eliminates undue burdens on these resources and will help transmission providers and their customers effectively manage the costs of integration,” Wellinghoff said last week.

http://www.democraticunderground.com/112718994


These two recent posts more broadly discuss the nature of the changes we are going through.

IEA says wind and solar can carry bulk of energy transformation
http://www.democraticunderground.com/112765222

Flexible backup capacity is better option
Need for power storage overstated
http://www.democraticunderground.com/112763672